Spencer’s Benefits Reports NetNews – April 18, 2014

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News

April 18, 2014

New Estimated Costs For ACA Health Coverage Provisions Are Lower Than Previously Projected

Newly released estimates of the effect of insurance coverage provisions of the Patient Protection and Affordable Care Act (ACA) on the federal budget are significantly lower than the previously released projections. Specifically, the Congressional Budget Office (CBO) and Joint Committee on Taxation (JCT) estimated that the net costs to the federal government are $5 billion less than earlier predictions for 2014 and $104 billion less than previous reports suggested for the 2015-2024 period. The report revealed that the net costs of the ACA are almost entirely due to spending on subsidies for insurance obtained through health insurance exchanges and are offset by penalty payments, revenues from excise taxes on high premium plans, and projected changes from employer coverage. These changed estimations are also a function of the incorporation of the CBO’s most recent economic forecast, recent CBO and JCT analysis of exchange premiums and plan characteristics, revisions to estimates of early retirees, and new regulations and administrative actions that were implemented between December of 2013 and March 2014…

Many employers are beginning to scale back their medical plan designs in an effort to avoid the “Cadillac tax” required by the Patient Protection and Affordable Care Act (ACA) in 2018, according to the fifth annualMedical Plan Trends Report issued by Highroads and CEB. The result is an increasing share of cost for employees, including an increase in high-deductible plans, a greater number of plans with coinsurance charges, higher out-of-pocket maximums, and increases in emergency room copayments…

Attorneys’ Fees Available Under Correct Application Of Five-Factor Test, Second Circuit Rules

An insured covered under an employer-sponsored long-term disability insurance plan could recover attorneys’ fees because he was successful on the merits in his lawsuit against the plan administrator, and the lower court misapplied the legal framework when evaluating his eligibility for those fees, the Second Circuit ruled, vacating and remanding the lower court’s ruling in part. The case isDonachie v. Liberty Life Assurance Company of Boston, (Nos.12-2996-cv (Lead) and 12-3031 (XAP))…

April 17, 2014

Defined contribution (DC) plan sponsors need to focus more attention on the “holistic” financial decisions that impact their workers’ retirement security, advised Matt Fellowes and Jake Spiegel, CEO, and research associate, respectively, at HelloWallet, a financial services company, in a recently-released research paper entitledDebt Savers in Defined Contribution Plans. Debt savers, according to the authors, are people who accumulate debt faster than they accumulate savings. Fellowes and Spiegel report that, over the last 20 years, the average debt burden of retirement plan participants has greatly increased: the majority of participants are accumulating debt faster than they are accumulating savings in their DC plans. More specifically, over 60 percent of households that have a DC plan added more debt to their family balance sheet than they contributed to retirement savings between 2010 and 2011. Obviously, this wears away at available retirement money, the article noted…

Senate Passes UI Bill With Pension Offsets

The Senate on April 7, 2014 approved a five-month extension of federal unemployment benefits (HR 3979) with the costs of the legislation offset in part by provisions affecting pension funding. However, the fate of the measure is uncertain in the House because speaker John Boehner (R-OH) has said he would not hold a vote on the measure unless it includes job-creating provisions…

Uninsured Rates Drop Among Children, Disparities Narrowing

The percentage of children without health insurance in the U.S. has dropped from 9.7 percent in 2008 to 7.5 percent in 2012, according to a report by University of Minnesota researchers, the State Health Access Data Assistance Center (SHADAC), and the Robert Wood Johnson Foundation (RWJF). The report showed that the increase in insurance coverage was significant among children in demographic groups most likely to be uninsured, namely non-white and Hispanic children and children from low-income families…

April 16

For single-employer pension plans terminating April through June 2014, and for multiemployer plans involved in a mass withdrawal, the interest rate established by the PBGC for calculating immediate annuities is 3.47 percent, up from the 3.35 percent rate that applied in January through March 2014…

ACA Impacts Employers’ Retirement Benefits Strategy

Forty-three percent of employers report that the Patient Protection and Affordable Care Act (ACA) has affected their current retirement benefits strategy and spending, and 45 percent believe the ACA will change their retirement plans in the future, according to a LIMRA Secure Retirement Institute (LIMRA SRI) study. Of those who believed the ACA has changed their retirement benefits strategy, 55 percent said they are spending less money on retirement benefits and shifting costs to employees and 42 percent said they are spending less time evaluating their retirement benefits (3 percent report other changes)…

The financial health of corporate America’s largest pension plans improved significantly in 2013, according to a recent analysis by Towers Watson. The analysis cited rising interest rates, which lowered liabilities, and moderate investment returns as the primary reasons for the overall improvement…

April 14, 2014

ERIC Urges HHS To Rule That Self-Funded Plans Should Not Be Subject To HIPAA Certification Requirements

The ERISA Industry Committee (ERIC) recently urged the Department of Health and Human Services (HHS) to modify proposed rules that would require employer group health plans to certify compliance with standards and operating rules adopted under the Health Insurance Portability and Accountability Act of 1996 (HIPAA) for certain electronic transactions…

More Workers Satisfied With Finances, Confident About Retirement: Towers Watson

While U.S. workers are more satisfied with their financial situation now compared with five years ago, their retirement confidence still remains below levels prior to the financial crisis, according to recent research from consultant Towers Watson. TheGlobal Benefit Attitudes Survey also found that workers are especially worried about the affordability of health care in retirement, and significant numbers have been forced to cut back on spending and plan to delay retirement, many until age 70 or later…